On balance day, a physical inventory count and cost was $10,250, and the market value of inventory was $10,180. At what figure will the inventory be shown in the balance sheet? $10,250$10,180$10,215None of the above.

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Description: On balance day, a physical inventory count and cost was $10,250, and the market value of inventory was $10,180. At what figure will the inventory be shown in the balance sheet? $10,250$10,180$10,215None of the above.

Answered: On balance day, a physical inventory…

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter7: Inventories: Cost Measurement And Flow Assumptions

Section: Chapter Questions

Problem 3RE: Reid Company uses the periodic inventory system. On January 1, it had an inventory balance of...

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On balance day, a physical inventory count and cost was $10,250, and the market value of inventory was $10,180. At what figure will the inventory be shown in the balance sheet?

$10,250
$10,180
$10,215
None of the above.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution

Step 1

Note: As per relevant Standard, inventory is valued at lower of cost or Net relizable value.

where,

Net relizable value = market value of inventory - Cost to be incurred for selling of the goods

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